Post-earnings recap
Reported
Thu, Aug 20, 2026
EPS actual
$1.03
EPS est.
$0.81
EPS surprise
+26.38%
1-day move
-24.55%
Despite beating EPS expectations, Advance Auto Parts' stock dropped significantly by 24.55% following the earnings report. The decline was primarily driven by a slight decrease in comparable sales, particularly in the DIY channel, which raised concerns among investors. However, the company showed positive trends in operating margins and free cash flow, indicating potential for future growth.
| Metric | Actual | Expected | Surprise |
|---|---|---|---|
| EPS | $1.03 | $0.80 | +26.38% |
| Revenue | $2.00B | $2.00B | — |
| Adjusted Operating Margin | 5.6% | — | +260 bps |
| Free Cash Flow | $120M | — | — |
Management expressed cautious optimism about the company's performance, highlighting improvements in operating margin and free cash flow. They reaffirmed their sales growth guidance for the year.
Management reaffirmed full-year guidance for sales growth of 1%-2%.
The company added approximately 80,000 new SKUs to its assortment catalog.
Advance Auto Parts, Inc. (AAP) is a leading retailer in the automotive parts sector, providing a wide range of products for vehicle maintenance and repair. As consumer spending on automotive services remains strong, AAP's performance is closely tied to trends in the automotive industry and overall consumer discretionary spending.
Last quarter
In Q1-2026, AAP reported an EPS of $0.77, significantly exceeding expectations, which led to a strong stock performance with a 14.40% increase the following day. The company has shown a consistent ability to beat earnings estimates recently.
Management promises and guidance
EPS beat streak
7Q
EPS beat rate
88%
Avg EPS surprise
+28.12%
Avg 1-day reaction
+1.84%
Analysts are generally optimistic about AAP's upcoming earnings, expecting continued strong performance based on recent trends. The consensus EPS estimate of $0.80 indicates confidence in the company's ability to maintain profitability.
Bull case
If AAP beats earnings expectations again, it could signal strong operational improvements and increased market share, potentially driving the stock higher.
Bear case
Conversely, if AAP fails to meet expectations, it may raise concerns about its growth prospects and operational challenges, leading to a negative market reaction.
Key metrics to watch
EPS
$0.80Earnings per share is a key indicator of profitability and will show how well AAP is managing costs and generating income.
Revenue
$2.0BTotal revenue reflects the company's sales performance and demand for automotive parts, which is crucial for assessing growth.
The print will turn on these.
Q1
Will AAP's EPS exceed the consensus estimate of $0.80?
A beat on EPS would reinforce the company's recent trend of strong performance and could boost investor confidence.
Q2
What are the revenue figures relative to the $2.0B consensus?
Revenue performance will indicate demand for AAP's products and overall market conditions, which are critical for future growth.
Est. EPS
$3.81
Est. Rev
$1.3B
Impl. Move
±41.6%
Why consensus could be wrong
The consensus may underestimate AAP's ability to capitalize on recent trends in automotive maintenance, which could lead to stronger-than-expected revenue growth.
Supporting evidence
AAP's recent EPS surprises indicate a trend of operational improvement that may not be fully reflected in current estimates.
The strong consumer demand for automotive parts suggests that revenue could exceed expectations despite broader economic concerns.
Key risk
If revenue comes in significantly above $2.0B, it could challenge the current bearish sentiment.
Pre-commit to what would confirm each case.
This quarter's performance will hinge on AAP's ability to sustain profitability and revenue growth amidst competitive pressures.
Bull confirmed if
An EPS of $0.85 or higher would confirm the bull case, indicating strong operational performance.
Bear confirmed if
An EPS below $0.70 would confirm the bear case, suggesting potential issues with demand or cost management.
What the market is pricing for the move.
Implied Move
±26.81%
Historical Avg
±16.4%
The options market is pricing in a significant move, indicating that traders expect volatility around the earnings report.
Options are pricing ±26.8% while AAP has averaged ±16.4% over the last 8 prints — setup is pricing rich.
ATM IV
0.6%
30d HV
68.1%
Smart-money positioning from the most recent 13F filings.
Institutional
127.12%
of float
Insider
0.74%
of float
Holders
490
institutions
Top Holders· as of Jun 2026
Blackrock Inc.
9,352,439 sh · $385.3M
15.48%
4.8%
Likely market behavior by outcome. Not investment advice.
Beat & raise
If AAP beats expectations, history suggests the stock could rise by around 6.44%, confirming strong operational improvements.
In line / cautious
If results are in line with expectations, the stock may see muted movement as investors await further guidance on future performance.
Miss
If AAP misses earnings expectations, the stock could drop by approximately 8.42%, reflecting investor concerns about growth.
The lines on the call that would change the story.
Price (T.Rowe) Associates Inc
8,428,863 sh · $347.3M
13.96%
5.6%
Pzena Investment Management LLC
4,389,501 sh · $180.8M
7.27%
2.1%
Vanguard Portfolio Management LLC
3,740,719 sh · $154.1M
6.19%
3.3%
Dimensional Fund Advisors LP
3,063,303 sh · $126.2M
5.07%
44.0%
13F filings updated quarterly. Position deltas show change in shares vs. the prior quarter.